There has been a boom in the housing market in the Central Queensland ming towns, namely Moranbah, Nebo, Dysart and Blackwater with average prices going from $40,000 to around $285,000 in a little over a year and rents skyrocketing to around the $400 to $500 per week mark.
I purchased two houses in Mt Isa during a previous boom ten years ago, and while they are still positive geared with good rents, the capital gains have been nill.
I have been asked by my boss if I wish to buy the house the company is currently renting for $500 per week and they would rent it back off me. It is a 4-bedroom fibro with pool and would currently fetch around $290,000. Do I buy in another mining town?
Peter
Its all about managing your risk. Mining towns are high risk, in that those towns rely on the price of coal staying high. Thats not to say things wont stay good but you must be aware of commodity cycles and resources are renowned for their large highs and lows. If you already have some of these type of properties maybe you should diversify.
What’s the expected life of the mine? How easy is it for other investors to build in these towns? How easy would it be to resell if you needed to?
consider Karratha – the supply contracts are very long term i.e. 20 years plus, and hence more insulated from typical mining towns where mines can shut overnight if commodity prices move against them. It is difficult to buy into there though and supply is tight.
FYI I own a property in Karratha
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
I’ll bet your capital gains in Mt Isa are looking a lot better now, and will be even better next year! And returns are still pretty high too (higher than what you are quoting elsewhere).
Do you want cash flow or CG? Do your homework thoroughly and if you do go for another mining town, at least make sure it’s a different commodity and mining company to give you some form of diversification…
Cheers,
Scotty3Originally posted by scotty3:I’ll bet your capital gains in Mt Isa are looking a lot better now, and will be even better next year! And returns are still pretty high too (higher than what you are quoting elsewhere).
Do you want cash flow or CG? Do your homework thoroughly and if you do go for another mining town, at least make sure it’s a different commodity and mining company to give you some form of diversification…
Cheers,
Scotty3hey scotty3 any resaon for Mt Isa to grow?
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loan pre approval from Australia in 48 hours
Low Doc from 6.85%
Yep.
New huge multi-national has come and bought the mine and there is a new life to the place. Hundreds of new employees are being brought into the town and they have to live there (no fly-ins) with their families. Big housing shortage at present.Govt buildings were refurbished in the last year (govt won’t spend money like that for no reason) and new commercial investment happening. Talk of upgrading the rail link and a $6 million upgrade of showground to a national rodeo facility, to name a few of the things happening.
How does that sound?
scotty3
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